US dollar index continues to trade lower for the 4th consecutive week and lost more than 150 pips from high of 99.67. The decline was mainly due to weak US economic data especially ISM manufacturing index, retail sales which has increased hopes of rate cut by the Fed. The easing of US-China trade tension also decreased the demand for Safe-haven assets like yen.
According to the CME Fed Watch, the probability of rate cut increased to 91.4% from 72.7% a week ago, the chance of keeping rates unchanged declined to 8.6% from 27.2%.
On the lower side, near term support is around 97 and any violation below will drag the index till 96 /97.40 will be acting as major resistance. Any close above targets 97.76/98/98.65.
It is good to sell on rallies around 97.40-45 with SL around 98 for the TP of 96.
